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Item 1. Business

2022-03-18 compared with 2021-03-29 · 654 added, 565 removed, 35 unchanged (97% of the section changed)

We are a creator of

mobile device measurement solutions that has developed innovative solutions designed to address shortcomings in multiple verticals,

including the e-commerce fashion/apparel, shipping/parcel and do it yourself, or DIY, industries.

Utilizing our sophisticated

algorithms within our proprietary technology, we can calculate and record measurements in a variety of novel ways, and most importantly,

increase revenue for businesses across the globe.

Our solutions can

be utilized to accurately take measurements of a variety of items via a mobile device.

By downloading the application to a smartphone,

the user is then able to run the mobile device over the surface of an item the user wishes to measure.

The information is then

automatically sent to a cloud-based server where the dimensions are calculated through our proprietary algorithms, and the accurate

measurements (+ or - 2 centimeters) are then sent back to the user’s mobile device.

We believe that the commercial applications

for this technology are significant in many areas.

Currently, we are

mainly focusing on the e-commerce fashion/apparel industry.

In addition, our solutions address the shipping/parcel and DIY uses

We are in the commercialization phase of our products, although

we have only generated minimal revenues to date.

While we rollout our products to major retailers and apparel companies, there

is a lead time for new customers to ramp up before we can recognize revenue.

This lead time varies between customers, especially

when the customer is a tier 1 retailer, where the integration process may take longer.

Generally, first we integrate our product

into a customer’s online platform, which is followed by piloting and implementation, and, assuming we are successful, commercial

roll-out, all of which takes time before we expect it to impact our financial results in a meaningful way.

While we have begun

generating initial sales revenue, we do not expect to generate meaningful revenue during the upcoming quarters.

In addition, the

COVID-19 pandemic has had a particularly adverse impact on the retail industry and this has resulted in an adverse impact on our

marketing and sales activities.

For example, we have three ongoing pilots with international retailers that have been halted, we

are unable to participate physically in industry conferences, our ability to meet with potential customers is limited and in certain

instances sales processes have been delayed or cancelled.

Because of the numerous risks and uncertainties associated with the COVID-19

pandemic, the success of our market penetration and our dependence on the extent to which MySizeID is adopted and utilized, we

are unable to predict the extent to which we will recognize revenue.

We may be unable to successfully develop or market any of

our current or proposed products or technologies, those products or technologies may not generate any revenues, and any revenues

generated may not be sufficient for us to become profitable or thereafter maintain profitability.

Our cloud-based software

platform provides accurate sizing and measurement with broad applications including the online fashion/apparel industry, logistics

and courier services and home DIY.

This proprietary technology is driven by several patented algorithms which are able to calculate

and record measurements in a variety of novel ways.

Although specific functionality varies by product, our core solutions address

the need for highly accurate measurements in a variety of consumer friendly, every day uses.

The following are

some select key features:

We design our solutions to be flexible and configurable, allowing our clients to match their use of our

algorithms and software with their specific business processes and workflows.

Our platform has been organically developed

from a common code base, data structure and user interface, providing a consistent user experience with powerful features

that are easily adaptable to our clients’

is a provider of an innovative artificial intelligence driven measurement solutions that are designed to address shortcomings

in multiple verticals, including the e-commerce fashion/apparel, shipping/parcel and do it yourself, or DIY, industries.

we are mainly focusing on the e-commerce fashion/apparel industry.

Utilizing our sophisticated algorithms within our proprietary

technology, we can calculate and record measurements in a variety of novel ways, and most importantly, increase revenue for businesses

across the globe.

Our solutions can be utilized

to accurately take measurements of a variety of items via a mobile device.

By downloading the application to a smartphone, the user is

then able to run the mobile device over the surface of an item the user wishes to measure.

The information is then automatically sent

to a cloud-based server where the dimensions are calculated through our proprietary algorithms, and highly accurate measurements (+ or -

2 centimeters) are then sent back to the user’s mobile device.

We believe that the commercial applications for this technology

are significant in many areas.

Our flagship product, MySizeID,

enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use

of our application on their mobile phone or through a simple questionnaire if the user decides not to download the application.

syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application,

and only presents items for purchase that match their measurements to ensure a correct fit.

MySizeID is available for license by retailers

and download by consumers on both iOS and Android operating systems.

While we rollout our

products to major retailers and apparel companies, there is a lead time for new customers to ramp up before we can recognize

This lead time varies between customers, especially when the customer is a tier 1 retailer, where the integration process

may take longer.

Generally, first we integrate our product into a customer’s online platform, which is followed by piloting

and implementation, and, assuming we are successful, commercial roll-out, all of which takes time before we expect it to impact our

financial results in a meaningful way.

While we have begun generating initial sales revenue, we do not expect to generate meaningful

revenue during 2022 from MySizeID .

Because of the numerous risks and uncertainties associated with the success of our market penetration and our

dependence on the extent to which MySizeID is adopted and utilized, we are unable to predict the extent to which we will recognize

We may be unable to successfully develop or market any of our current or proposed products or technologies, those products

or technologies may not generate any revenues, and any revenues generated may not be sufficient for us to become profitable or

thereafter maintain profitability.

Zigdon Agreement

May 26, 2021, we, My Size Israel 2014 Ltd, or My Size Israel, and Shoshana Zigdon entered into an Amendment to Purchase Agreement,

or the Amendment, which made certain amendments to a Purchase Agreement between the parties dated February 16, 2014, or the Purchase

to the Amendment, Ms.

Zigdon agreed to irrevocably waive (i) the right to repurchase certain assets related to the collection of data

for measurement purposes that My Size Israel acquired from Ms.

Zigdon under the Purchase Agreement and upon which our business is substantially

dependent, or the Assets, and (ii) all past, present and future rights in any of the intellectual property rights sold, transferred and

assigned to My Size Israel under the Purchase Agreement and any modifications, amendments or improvements made thereto, including, without

limitation, any compensation, reward or any rights to royalties or to receive any payment or other consideration whatsoever in connection

with such intellectual property rights, or the Waiver.

In consideration of the Waiver, we issued 2,500,000 shares of common stock to

the Purchase Agreement prior to the Amendment, Ms.

Zigdon had a right to repurchase the Assets until June 16, 2021 at the market price

of the Assets as determined by a third party independent valuation.

In addition, under the Purchase Agreement prior to the Amendment,

Zigdon would have had a right to receive 18% of My Size Israel’s operating profit, directly or indirectly connected with the

Assets, together with VAT for a period of seven years from the end of the development period of My Size Israel’s measurement solution.

2021 Financing

October 26, 2021, holders of warrants exercised an aggregate of 2,625,908 shares of common stock in consideration for $2,889,000.

addition, on the same day, we entered into securities purchase agreements, or the RD Purchase Agreements with several

institutional investors, or the Purchasers, pursuant to which we agreed to sell and issue in the RD Offering an aggregate of

2,514,800 of our shares of common stock, or the RD Shares, and, in a concurrent private placement, an aggregate of 1,886,100

unregistered warrants to purchase shares of common stock, or the RD Warrants, at an offering price of $1.352 per share and

associated warrant.

In addition, we entered into security purchase agreements, or the PIPE Purchase Agreements, and together with

the RD Purchase Agreements, the Purchase Agreements, with the Purchasers pursuant to which we agreed to sell and issue in a PIPE

Offering an aggregate of 3,772,208 unregistered shares of common stock, or the PIPE Shares, and together with the RD Shares, the

Shares, and unregistered warrants to purchase up to an aggregate of 2,829,156 shares of common stock, or the PIPE Warrants and

together with the RD Warrants, the Warrants, at the same purchase price as in the RD Offering.

The Offerings closed on October 28,

Warrants are immediately exercisable and expire five years from issuance at an exercise price of $1.26 per share, subject to adjustment

as set forth therein.

The Warrants may be exercised on a cashless basis if there is no effective registration statement registering the

shares underlying the warrants.

connection with the PIPE Purchase Agreement, we entered into a registration rights agreement, or the Registration Rights Agreement, with

the Purchasers.

Pursuant to the Registration Rights Agreement, we will be required to file a resale registration statement, or the Registration

Statement, with the Securities and Exchange Commission, or the SEC, to register for resale the shares issuable in connection with the

PIPE Offering, including shares issuable upon exercise of the Warrants, within 20 days of the signing date of the PIPE Purchase Agreement,

or the Signing Date, and to have such Registration Statement declared effective within 60 days after the Signing Date in the event the

Registration Statement is not reviewed by the SEC, or 90 days of the Signing Date in the event the Registration Statement is reviewed

gross proceeds to us in respect of the Offerings was approximately $8.5 million, before deducting fees payable to the placement agent

and other estimated offering expenses payable by us.

also entered into a letter agreement, or the Engagement Agreement, with H.C.

Wainwright & Co., LLC, or Wainwright, pursuant to which

Wainwright agreed to serve as the exclusive placement agent for us in connection with the Offerings.

We paid Wainwright a cash placement

fee equal to 7% of the aggregate purchase price for the Shares sold in the Offerings, a management fee of 1% of the aggregate purchase

price for the Shares sold in the Offerings, a non- accountable expense allowance of $35,000, $50,000 for fees and expenses of legal counsel

and clearing expenses of $15,950.

Wainwright also received placement agent warrants, or the Placement Agent Warrants, on substantially

the same terms as the Purchasers in the Offering in an amount equal to 7% of the aggregate number of Shares sold in the Offerings, or

440,091 shares, at an exercise price of $1.69 per share and a term expiring on October 26, 2026.

May 2021, we received notice from Custodian Ventures, LLC, or Custodian, of its intention to nominate four candidates to stand for election

to our Board of Directors at our 2021 annual meeting of stockholders.

Custodian subsequently made a book and records request and

has made public statements calling for changes to our management.

September 22, 2021, Custodian, commenced an action in the Court of Chancery of the State of Delaware captioned, Custodian Ventures,

Mysize, Inc., C.A.

2021-0817-LWW , or the Delaware Action.

In the Delaware Action, Custodian sought an order from the Court

of Chancery pursuant to Section 211 of the General Corporation Law of the State of Delaware compelling us to hold an annual meeting.

As further described below, on November 4, 2021, we entered into a settlement agreement, or the Settlement Agreement, with Custodian,

Activist Investing LLC, David Aboudi, Partick Loney and David Natan, collectively, the Lazar Parties, settling and dismissing the Delaware

October 19, 2021, we commenced an action in the United States District Court for the Southern District of New York captioned My Size,

David Lazar, Custodian Ventures LLC, Activist Investing LLC, Milton C.

Ault III, Ault Alpha LP, Ault Alpha GP LLC, Ault Capital

Management LLC, Ault & Company Inc., David Aboudi, Patrick Loney and David Nathan, Civil Action No, 1:21-cv-08585, pursuant to Sections

13(d) and 14(a) of the Securities Exchange Act of 1934, and certain rules promulgated thereunder, or the SDNY Action.

The complaint sought,

among other things, declaratory and injunctive relief related to defendants’ efforts to nominate a slate of directors for election

at our next annual meeting.

The complaint alleged that the defendants formed an undisclosed “group” for purposes of Section

13 (d) and has misrepresented its true purpose in purchasing My Size, Inc.

stock in filings made with the SEC.

In addition, the complaint

alleged that the defendants engaged in an unlawful solicitation of investors in violation of the Exchange Act proxy rules in connection

with their efforts to elect a slate of directors to our Board of Directors.

On October 20, 2021, the Court signed an order granting

a hearing on an anticipated motion for a preliminary injunction and expedited scheduling and discovery in aid thereof, and scheduled

that hearing for December 2, 2021.

As further described below, on November 4, 2021, we entered into the Settlement Agreement with the

Lazar Parties settling and dismissing the claims asserted in the SDNY Action and the Delaware Action against one another.

8, 2021, the remaining defendants in the SDNY Action filed and answer and counterclaim asserting a claim against us pursuant to New York

Civil Rights Law Section 70-a, also known as New York’s anti-SLAPP statute.

November 4, 2021, we entered into the Settlement Agreement, or the Lazar Settlement Agreement, with the Lazar Parties.

Pursuant to the

Lazar Settlement Agreement, we and the Lazar Parties agreed to compromise and settle the Delaware Action and SDNY Action.

pursuant to the Lazar Settlement Agreement, we reimbursed Custodian for out of pocket expenses and in consideration for the dismissal

and release of claims against the Company an aggregate amount equal to $275,000.

With respect to our 2021 annual meeting of stockholders,

Custodian agreed to, among other things, withdraw or rescind (i) its May 12, 2021 notice of stockholder nominations of four director

candidates with respect to our 2021 annual meeting of stockholders, (ii) the notice dated October 28, 2021 submitted by Custodian to

us notifying us of Custodian’s continued intent to bring its nomination of four director candidates before our stockholders at

the 2021 annual meeting, and (iii) any and all related materials and notices submitted to us in connection therewith or related thereto

and to not take any further action in connection with the solicitation of any proxies in connection with us.

Custodian also agreed to

cease any and all solicitation and other activities in connection with the 2021 annual meeting.

In addition, Custodian agreed to certain

customary standstill provisions for a period of five years beginning on the effective date of the Agreement, or the Standstill Period.

The Lazar Settlement Agreement also provides that during the Standstill Period, the Lazar Parties will vote all shares of our common

stock it beneficially owns in accordance with any proposal or recommendation made by us or our Board of Directors that is submitted

to our stockholders, unless to do so would violate applicable law and except with respect to certain extraordinary transactions.

Lazar Settlement Agreement also contains non-disparagement and confidentiality provisions, subject to certain exceptions.

December 9, 2021, we subsequently entered into a Settlement Agreement, or the Ault Settlement Agreement, with Milton C.

Ault III, Ault

Alpha LP, Ault Alpha GP LLC, Ault Capital Management LLC, Ault & Company Inc., collectively the Ault Parties, which we agreed to

withdraw the SDNY Action against the Ault Parties and the Ault Parties agreed to withdraw the counterclaim that they asserted in that

action against the Company.

In addition, pursuant to the Settlement Agreement, we paid $70,000 to the Ault Parties in consideration for

the releases and other good and valuable consideration as set forth in the Ault Settlement Agreement.

Minimum Bid Price Deficiency

January 3, 2022, we were notified, or the Notification Letter, by the Nasdaq Listing Qualifications that we are not in compliance with

the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2), or the Rule, for continued listing on The Nasdaq Capital

Notification Letter provides that the Company has 180 calendar days, or until July 5, 2022, to regain compliance with the Rule.

compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive

business days.

In the event we do not regain compliance by July 5, 2022, we may then be eligible for additional 180 days if we meet the

continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital

Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency

during the second compliance period.

If we do not qualify for the second compliance period or fail to regain compliance during the second

compliance period, then Nasdaq will notify us of its determination to delist our common stock, at which point we will have an opportunity

to appeal the delisting determination to a Hearings Panel.

Share Purchase Agreement

February 7, 2022, My Size Israel 2014 Ltd, or My Size Israel, entered into a Share Purchase Agreement, or the Orgad Agreement, with Amar

Guy Shalom and Elad Bretfeld, or the Orgad Sellers, pursuant to which the Orgad Sellers agreed to sell to My Size Israel all of the issued

and outstanding equity of Orgad International Marketing Ltd., a company incorporated under the laws of the State of Israel, or Orgad.

Orgad operates an omnichannel e-commerce platform.

The Orgad Sellers are the sole title and beneficial owners of 100% of the shares

In consideration of the shares of Orgad, the Orgad Sellers are entitled to receive (i) up to $1,000,000 in cash, or the Orgad

Cash Consideration, (ii) an aggregate of 2,790,049 shares, or the Orgad Equity Consideration, of the our common stock, and (iii) earn-out

payments of 10% of the operating profit of Orgad for the years 2022 and 2023.

The transaction closed on the same day.

Orgad Cash Consideration is payable to the Orgad Sellers in three installments, according to the following payment schedule:

which we paid upon closing, (ii) $350,000 payable on the two-year anniversary of the closing, and (iii) $350,000 payable on the three-year

anniversary of the closing;

provided that in the case of the second and third installments certain revenue targets are met and subject

further to certain downward post-closing adjustment.

Equity Consideration is payable to the Orgad Sellers according to the following payment schedule:

(i) 1,395,025 shares were issued at

closing, and (ii) and 1,395,024 shares will be issued in eight equal quarterly installments until the lapse of two years from closing,

subject to certain downward post-closing adjustment.

payment of the second and third cash installments, the equity installments and the earn out are further subject in each case to the Orgad

Sellers being actively engaged with Orgad at the date such payment is due (except if the Orgad Sellers resign due to reasons relating

to material reduction of salary or adverse change in their position with Orgad or its affiliates).

connection with the Orgad Agreement, each of the Orgad Sellers entered into employment agreements with Orgad and six-month lock-up agreements

cloud-based software platform provides highly accurate sizing and measurement with broad applications including the online fashion/apparel

industry, logistics and courier services and home DIY.

Currently, we are mainly focusing on the e-commerce fashion/apparel industry.

This proprietary technology is driven by several patented algorithms which are able to calculate and record measurements in a variety

of novel ways.

Although specific functionality varies by product, we believe that our core solutions address the need for highly

accurate measurements in a variety of consumer friendly, every day uses.

have developed three products, MySizeID for the fashion/apparel industry, BoxSize for the logistics and courier services

market and SizeUp for the home DIY market.

enables shoppers to generate highly accurate measurements of their body to find proper fitting clothes and accessories, through

the use of our application on their mobile phone or through a simple questionnaire if the user decides not to download the application.

MySizeID syncs the user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled)

mobile application, and only presents items for purchase that match their measurements to ensure a correct fit.

available for license by retailers and download by consumers on both iOS and Android operating systems.

enables customers to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees.

offers shipping companies a variety of precise logistical data for more efficiently managing their supply chain, providing them with

an accurate way to compare the physical package with what is in the shipping manifest.

BoxSize solution is available for license

on both iOS and Android operating systems.

BoxSize is available on the Honeywell Marketplace and in August 2019 was approved

for Honeywell’s Independent Software Vendor Program, and MySize was granted an independent software vendor (ISV) status on

the Zebra Technologies and on DataLogic platforms.

is a digital tape measure that allows users to measure length, width and height of a surface by moving their smartphone from

point to point of an object or space.

SizeUp is a value-add for DIY and home improvement retailers whose customers struggle

to find the appropriately sized items (like blinds or curtains) for their homes or projects due to inaccurate measurements.

also is designed to replace rulers, tape measures and other measuring tools used for DIY projects.

SizeUp is available

for consumer download on both iOS and Android operating systems

following are some select key features of our solutions:

We design our solutions to be flexible and configurable, allowing our clients to match their use of our algorithms

and software with their specific business processes and workflows.

Our platform has been organically developed from a common code

base, data structure and user interface, providing a consistent user experience with powerful features that are easily adaptable

to our clients’ needs;

user experience.

Our intuitive, easy-to-use interface is based on current technology, multiple focus groups and automatically

adapts to users’

devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;

Big Data Generation.

While we supply to the user the information he/she requires, we gather certain vital information such as body measurement

and package volume which can be used anonymously to help the retailer acquire predictive size information on stocking, operations

and consumers that may be in between sizes.

All this information is being gathered and stored on our servers where it can

be used by retailers;

adapts to users’ devices, including mobile platforms, thereby significantly increasing accessibility of our solutions;

Data Generation.

While we supply to the user the information he/she requires, we gather certain vital information such as

body measurement and package volume which can be used anonymously to help the retailer acquire predictive size information on stocking,

operations and consumers that may be in between sizes.

All the information is being gathered and stored on our servers where

it can be used by retailers;

Label Solution .

Our solutions can be transformed into white label applications at an extra cost to any customer that

1 unchanged sentence

Non-Invasive.

Owing to our unique, non-invasive technology, the smartphone camera is not used for measurement;

all the measurements

are recorded by moving the smartphone over the consumer’s body or package, thus ensuring greater privacy.

Our Growth Strategy

We intend to drive

revenue primarily through penetration of the U.S.

market through a B2B2C model in the verticals we are targeting.

pursue the following growth strategies:

Sign Additional Commercial Agreements with U.S.

During 2019 and 2020, we entered into commercial agreements with Penti, DeMoulin, UniformMarket, and Tricorp among others.

We are in various stages of discussions with U.S.

retailers for the deployment of our measurement technology with a view to entering into additional commercial agreements.

Pursue a Two-Pronged

Commercialization Strategy.

We are seeking to accelerate adoption of our solutions

both through direct partnerships with e-commerce websites as well as through third party platform

While we seek to directly enter into partnerships with companies maintaining e-commerce

websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions

on third party platforms.

MySizeID is available for online retailers utilizing the

WooCoomerce, Shopify and Lightspeed platforms while BoxSize is available on the Honeywell

Marketplace, Zebra Technologies and Datalogic

Ongoing Investment in our Technology Platform.

We intend to continue to invest in building new software capabilities and extending our platform to bring the power of accurate measurement to a broader range of applications.

In particular, we seek not only to deliver size recommendations but to provide a robust, end-to-end, AI-driven platform that inspires consumer confidence and drives revenue growth by providing a superior consumer journey to both online and the brick and mortar stores.

Grow our database .

As the usage of our measurement apps increases, our database of information including user behavior and body measurements

generates valuable statistics.

Such data can be used in the big data market for targeted advertising and for blind consumer

Identify and acquire

synergistic businesses .

In order to reduce time to market and obtain complementary

technologies, we are seeking to acquire technologies and businesses that are synergistic to

our product offering.

Partnerships and cooperation –

in order to bring a wider solution for the retail market we are working to partner and integrate our technology with partners that can increase our penetration and offering to the market.

The mass adoption

of mobile technologies such as tablets and smartphones has led to a surge of consumer activity online.

Tasks that were once primarily

brick-and-mortar –

shopping for clothes, shipping a package, or buying supplies for a DIY home renovation project –

In taking measurements using our solution, the smartphone camera is not utilized;

instead, the measurements

are captured by scanning the smartphone over the consumer’s body or package, thus ensuring greater privacy.

Growth Strategy

aim to drive revenue primarily through penetration of the U.S.

market through a business to business to consumer (B2B2C) model

in the verticals we are targeting.

We are pursuing the following growth strategies:

Additional Commercial Agreements with U.S.

During 2020 and 2021, we entered into commercial agreements with Levi’s,

Nautica, Gant, Lacoste, Trutex, Penti, DeMoulin, UniformMarket, and Tricorp among others.

We are in various stages of discussions

and foreign retailers for the deployment of our measurement technology with a view to entering into additional commercial

a Two-Pronged Commercialization Strategy.

We are seeking to accelerate adoption of our solutions both through direct partnerships

with e-commerce websites as well as through third-party platform websites.

While we seek to directly enter into partnerships with

companies maintaining e-commerce websites in the apparel, courier and DIY markets, we are also seeking to deploy our solutions on

third-party platforms.

Furthermore, with the expansion of MySizeID through the release of our FirstLook Smart

Mirror, which we are offering to brick and mortar stores to digitize the physical stores, MySizeID is now

available for online retailers utilizing the WooCoomerce, Shopify, Lightspeed, PrestaShop, Bitrix and Wix platforms and to brick

and mortar stores through GK Software POS solution while BoxSize is available on the Honeywell Marketplace, Zebra Technologies

and Datalogic.

Investment in our Technology Platform.

We continue to invest in building new software capabilities and extending our platform

to bring the power of accurate measurement to a broader range of applications.

In particular, we seek not only to deliver size recommendations

but to provide a robust, end-to-end,artificial intelligence, or AI-driven platform that inspires consumer confidence and drives

revenue growth by providing a superior consumer journey to both online and the brick and mortar stores.

our database .

As the usage of our measurement apps increases, our database of information including user behaviour

and body measurements generates valuable statistics.

Such data can be used in the big data market for targeted advertising and for

blind consumer data mining.

and acquire synergistic businesses .

In order to reduce our time to market and obtain complementary technologies, we

are seeking to acquire technologies and businesses that are synergistic to our product offering.

We recently completed an acquisition

of Orgad which operates an omnichannel e-commerce platform.

and cooperation.

In order to bring a wider solution for the retail market we are working to partner and integrate

our technology with partners that can increase our penetration and offering to the market.

mass adoption of mobile technologies such as tablets and smartphones has led to a surge of consumer activity online.

Tasks that were

once primarily brick-and-mortar – shopping for clothes, shipping a package, or buying supplies for a DIY home renovation project

– have now shifted to digital, as consumers prefer the convenience of shopping anywhere, anytime.

E-commerce’s meteoric rise has been a boon to retailers

who can offer shoppers a simple customer experience through desktop or mobile devices.

Retail e-commerce sales worldwide for 2019

were estimated to be $3.5 trillion and forecast to grow to $6.5 trillion in 2022.

While many sectors have found ways to increase

revenue through e-commerce, e-commerce is still plagued by issues that cut into profits and negatively impact the bottom line,

such as customer returns, low consumer conversion, and associated restocking and shipping costs.

meteoric rise has been a boon to retailers who can offer shoppers a simple customer experience through desktop or mobile devices.

to Statista, retail e-commerce sales worldwide for 2021 were $5.0 trillion and this figure is forecast to grow by 50 percent

over the next four years, reaching about 7.4 trillion dollars by 2025.

While many sectors have found ways to increase revenue through

e-commerce, e-commerce is still plagued by issues that cut into profits and negatively impact the bottom line, such as customer returns,

low consumer conversion, and associated restocking and shipping costs.

Fashion/Apparel

The fashion market

is one of the fastest growing sectors of online retail –

what was already estimated to be an approximately $525 billion market

in 2019 and is projected to increase to over $1,003 billion by the end of 2025.

However, conveniences of online shopping, including

simple search filters, the ability to purchase apparel without trying it on, and free returns, have led consumers to a more free-wheeling

buying style that is costing retailers major dollars.

One of the biggest

causes for returns are sizing issues, due in part to a truly universal sizing system that leaves consumers guessing what size they

need or ordering multiple sizes and returning the ones that do not fit, all the retailer’s expense.

The value of e-commerce

items returned in the U.S.

was estimated to be $121 billion in 2017 and expected to reach to $348 billion in 2023.

To address this issue,

we have developed an innovative mobile technology for retailers, known as MySizeID .

MySizeID enables shoppers to

generate highly accurate measurements of their body to find proper fitting clothes and accessories, through the use of our App

on their mobile phone or through a simple questionnaire if the user decide not to download the app.

MySizeID syncs the

user’s measurement data to a sizing chart integrated through a retailer’s (or a white labeled) mobile application,

and only presents items for purchase that match their measurements to ensure a correct fit.

MySizeID is available for license

by retailers and download by consumers on both iOS and Android operating systems.

During 2020, MySizeID delivered over 12 million size recommendations.

the onset of the COVID-19 pandemic, a large volume of shopping has migrated online.

In a report by McKinsey from 2020, the total

global revenue of fashion sales through ecommerce jumped from 16% to 29%.

The same year, Shopify recorded that over 150 million

people shopped online for the first time.

An online shopping trend has enabled retailers to further re-strategize their shopping models

to gauge the interest of tech-savvy customers.

pandemic restrictions slowly begin to ease in the United States and abroad, the shift from online retail back to brick-and-mortar

shopping is revving up.

In addition, according

to analytics from Meticulous Research, AI in the retail market is expected to grow at a compound annual growth rate

of 34.4% from 2020, and is projected to be worth nearly $20 billion by 2027.

AI-powered solutions like virtual assistants,

chatbots, virtual try-on, and generated size recommendations can help retailers.

The technology extracts accurate customer insight and

provides improved shopping experiences to consumers who visit online stores.

The fashion market is one

of the fastest growing sectors of online retail – what was already estimated to be an approximately $758 billion market in 2021

and is projected to increase to over $1,003 billion by the end of 2025 according to DataFeedWatch.

However, conveniences of online shopping,

including simple search filters, the ability to purchase apparel without trying it on, and free returns, have led to returns.

the biggest causes for returns are sizing issues, due in part to a generally standardized sizing system that many retailers and clothing

Despite this universal system, many retailers’ clothes fit differently, which leaves consumers guessing what size

they need or ordering multiple sizes and returning the ones that do not fit, all at the retailer’s expense.

brands move online or significantly expand their online presence, we believe that developing innovative ways to connect with shoppers,

both online and offline, has become a top priority.

Shipping/Parcel

According to Pitney

Bowes, parcel revenue in 13 major countries around the world increased by 9% year over year from $323 billion in 2018 (reflecting

87.5 billion parcels) to $351 billion in 2019 or 103 billion parcels.

In the shipping/parcel industry, the dimensions of a package

are critical.

It is not merely the measurement of a package or box –

but rather the amount of space that the package or box

will take up on a truck, airplane, or ship that will be transporting the package or box.

Far too often, retailers use unfit packaging

for their items, adding additional costs in materials and shipping fees.

To address this issue

for shipping companies, we have developed an innovative mobile technology known as BoxSize .

BoxSize enables customers

to quickly and easily measure the size and volume of a parcel to accurately calculate shipping fees.

It also offers shipping companies

a variety of precise logistical data for more efficiently managing their supply chain, providing them with an accurate way to

compare the physical package with what is in the shipping manifest.

BoxSize solution is available for license on both iOS

and Android operating systems.

available on the Honeywell Marketplace and in August 2019 was approved for Honeywell’s Independent Software Vendor Program,

and MySize was granted an independent software vendor (ISV) status on the Zebra Technologies and on DataLogic platforms.

Similar to issues

in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit and

measurements.

According to Pitney Bowes,

parcel revenue in 13 major countries around the world increased by 22% year over year from $351 billion in 2019

(reflecting 103 billion parcels) to $430 billion in 2020 (reflecting 131 billion parcels).

In the shipping/parcel

industry, the dimensions of a package are critical.

It is not merely the measurement of a package or box – but rather the amount

of space that the package or box will take up on a truck, airplane, or ship that will be transporting the package or box.

Far too often,

retailers use unfit packaging for their items, adding additional costs in materials and shipping fees.

to issues in the apparel and fashion market, big box, hardware, furniture, and DIY stores are plagued by returns due to incorrect fit

and measurements.

In an industry where precise measurement for projects is an absolute necessity, e-commerce has not grown as quickly

as in other industries which we believe is due to lack of consumer confidence in measurements at home and buying the correct item

To address this issue for retailers, we have developed an innovative

mobile technology known as SizeUp .

SizeUp is a digital tape measure that allows users to measure length, width and

height of a surface by moving their smartphone from point to point of an object or space.

SizeUp is a value-add for DIY

and home improvement retailers whose customers struggle to find the appropriately sized items (like blinds or curtains) for their

homes or projects due to inaccurate measurements.

SizeUp also is designed to replace rulers, tape measures and other measuring

tools used for DIY projects.

SizeUp is available for consumer download on both iOS and Android operating systems, with more

than 1,210,600 consumer downloads to date.

We have released the

MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own body in

order to size clothing in the best way possible without the need to try the clothes on before purchasing.

The benefit of our application

is that it simplifies the process of purchasing clothes online and significantly reduces the rate of returns of ill-fitting clothing.

The application is

the result of a research and development effort that combines:

anthropometric research

analyses of information pertaining to body measurements derived from a survey and the subsequent determination of

as in other industries which we believe is due to lack of consumer confidence in measurements at home and buying the correct item online.

have released the MySizeID app for both iOS and Android which assists consumers to take highly accurate measurement of their own

body in order to size clothing in the best way possible without the need to try the clothes on before purchasing.

is designed to simplify the process of purchasing clothes online and significantly reduce the rate of returns of poor-fitting

During 2021, MySizeID delivered over 21 million size recommendations.

application is the result of a research and development effort that combines:

anthropometric

research – analyses of information pertaining to body measurements derived from a survey and the subsequent determination of

correlations between body parts;

body measurement

algorithm research –

an algorithm created by us to measure body parts;

retailers size chart

analyses –

adopting a deep understanding of the size charts of retailers and the corresponding “body to garment

MySizeID allows

consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online

measurement algorithm research – an algorithm created by us to measure body parts;

size chart analyses – adopting a deep understanding of the size charts of retailers and the corresponding “body to garment

allows consumers to create a secure, online profile of their personal measurements, which can then be utilized, with partnered online

retailers, to ensure that no matter the manufacturer or size chart, they will get the right fit.

MySizeID operates based

on the use of existing sensors in smart phones which enable, through a specific purpose application, the measurement of the body

of any consumer by moving the smartphone phone along his or her body.

The MySizeID application does not rely on user photographs

or any additional hardware;

all a user needs to do is scan their body with their smartphone and the application records their

measurements.

The measurements can then be saved in our database in the cloud, enabling the user to search for clothes in various

retailer websites without worrying about size.

When a search is made, the retailer will connect to our cloud database, and then

provide results based on the user’s measurements and other parameters as he or she may have defined.

This data is also saved

for use when a customer enters a brick and mortar store to help serve the customer more efficiently and to provide a better shopping

Screenshot of MySizeID on

smartphone and e-commerce website

As part of the integration

process, we offer to the retailer three main components:

MySizeID operates based on the

use of existing sensors in smart phones which enable, through a specific purpose application, the measurement of the body of any consumer

by moving the smartphone phone along his or her body.

The MySizeID application does not rely on user photographs or any additional

all a user needs to do is scan their body with their smartphone and the application records their measurements.

The measurements

can then be saved in our database in the cloud, enabling the user to search for clothes in various retailer websites without worrying

When a search is made, the retailer will connect to our cloud database, and then provide results based on the user’s

measurements and other parameters as he or she may have defined.

This data is also saved for use when a customer enters a brick and mortar

store to help serve the customer more efficiently and to provide a better shopping experience.

Screenshot of MySizeID on smartphone and e-commerce website

part of the integration process, we offer to the retailer four main components:

MySizeID comes in the form of a native app or as white label app.

Our native app can be used “as is”

integrated into the retailer’s e-commerce website.

Alternatively, it can be white labeled according to the retailer’s needs in a manner that showcases the retailer brand (colors, logo etc.).

The retailer can also receive the MySizeID SDK, and integrate it into its own existing application so the retailer’s consumers will not have to have two separate apps when shopping online.

During 2020, we released a ‘Made 2 Measure’

for MySizeID which allows retailers to receive a custom body measurement instead of a size to make a custom made clothing.

developed and released a contact less shopping feature that enables consumers to scan a barcode through the MySizeID app when they

are in the brick and mortar store to make a purchase completely free of contact.

Moreover we have released MySizeID

app 2.0 version features a simpler onboarding experience with video tutorials focusing on a personalized consumer shopping experience.

In addition, we recently announced the full integration of our

e-commerce shoe sizing solution directly to retailers’

websites and plan to introduce a 3D try-on avatar feature in the fourth

quarter of 2021.

Furthermore, we recently announced a planned launch of an application for the Evropeyskiy Mall in Russia which

is designed to streamline in-person shopping from browsing to point of sale.

When a consumer enters into the retailer’s website and looks for a specific item,

he or she can click on the MySizeID widget which will inform the consumer of his

or her recommended size, based on his or her actual measurements, as measured using the

app and the item he or is looking at.

The widget has two features:

Manual mode –

allows the user to obtain size from the following parameters:

Our native app can be used “as is”

integrated into the retailer’s e-commerce website.

Alternatively, it can be white labeled according to the retailer’s

needs in a manner that showcases the retailer brand (colors, logo etc.).

The retailer can also receive the MySizeID software

development kit (SDK), and integrate it into its own existing application so the retailer’s consumers will not have to

have two separate apps when shopping online.

2021, we introduced a full integration of our e-commerce shoe sizing solution directly to retailers’ websites and added

a three-dimensional, or 3D, “Try-It-On” avatar feature.

Furthermore, we launched an application for the Evropeyskiy

Mall in Russia which is designed to streamline in-person shopping from browsing to point of sale.

When a consumer enters into the retailer’s website and looks for a specific item, he or she can click on the MySizeID widget

which will inform the consumer of his or her recommended size, based on his or her actual measurements, as measured using the app

and the item he or is looking at.

widget has two features:

mode – which allows the user to obtain size from the following parameters:

gender, height and weight only.

Thus we are able to give a size

estimation even without having all the measurements made with the app.

Guest mode - allows a user that does

not wish to sign up to MySizeID as a user, to obtain size recommendations as well.

Screenshot of MySizeID widget

on Modelista website

Another feature we

added is the in between sizing feature.

Our system can detect a user that has body dimensions that place the user between sizes

and lets the user know that.

That way a user can choose between the two sizes according to the user’s fit preference (tight/loose/average).

MyDash Platform

The MyDash platform is a smart back-office system where the retailer enters all the information regarding its size charts

that correlates to every product in its e-commerce site, and where the retailer can access the information on its users.

system is very flexible and can customize itself to every retailer’s needs.

In 2019, we improved the MyDash system

to be much more accessible, added walkthroughs, user guides and changed the user interface and much more for the ease of use.

We added mails mechanism, automatic error detections and size validation mechanism.

Screenshot of Back-Office

As we are licensing

the technology, we are currently offering MySizeID to retailers on a pay per use basis and a monthly subscription fee.

In a pay per use business model, every time the consumer obtains a recommended size, we charge the retailer for the usage.

In addition, we have developed applications for third party

ecommerce platforms so that retailers who use those platforms will find our application on the platform’s app store and will

be able to easily install it in their store.

In February 2019, MySizeID became available for online retailers utilizing

the Shopify platform.

Fashion and apparel retailers using Shopify can now deploy the MySizeID turnkey solution through the

simple integration of the MySizeID widget on their site.

During 2019 we also released applications for Lightspeed

and for WooCommerce which are the biggest ecommerce platform in the market allowing more retailers to easily integrate and use

the MySizeID solution.

In 2020, we integrated MySizeID with Sellers Commerce a US uniform platform, ZeroGrey, and Italian

Kooomo platform partner, Kaya Consulting,

an intuitive parcel measurement application that can provide real-time logistic data on package volumes and transportation, resulting

in improved operational efficiency and reduced operating expenses.

In addition, BoxSize allows customers to easily measure

the size of their parcel with their smartphone, calculate shipping costs and arrange for a convenient pick-up time for the package.

In 2018, we released BoxSize for Android which has a greater market opportunity since, based on our experience, most courier

companies are using Android based handheld devices.

As a result, BoxSize is available both on iOS and Android.

In 2020 released the

“One Click”

feature that enables the user to measure a package with just one swipe of the handheld device, instead

of taking three separate measurements.

are able to give a size estimation even without having all the measurements made with the app.

mode - allows a user that does not wish to sign up to MySizeID as a user, to obtain size recommendations as well.

feature we added is the “in-between sizing” feature.

Our system can detect a user that has body dimensions that place

the user in-between the clothes sizes being offered and lets the user know that.

That way a user can choose between the two sizes

according to the user’s fit preference (tight/loose/average).

addition, we have recently released our Instant-App

feature which allows shoppers to generate their body measurements directly from our widget, without the need to download our mobile

Using this technology, the shoppers can create their online profile of their personal measurements and complete a purchase faster

and easier with minimum distractions.

The body profile can be created while shoppers are viewing the page from their mobile phone, or by scanning a QR code on desktop that

will open the same page on the mobile phone.

of Instant-App widget on desktop on yumyumfashion website

The MyDash platform is a smart back-office system where the retailer enters all the information

regarding its size charts that correlates to every product in its e-commerce site, and where the retailer can access the information

on its users.

This system is customizable based on retailers needs.

In 2021, we changed the MyDash system in

order to increase the system’s accessibility, added walkthroughs, user guides and changed the user interface and much more

for the ease of use.

We added the option to use our generic size charts, added the option upload size chart files instead of typing

the size charts values manually, added more widget styling options and changed the pairing mechanism between the size chart and the

products to be more user-friendly.

Screenshot of Back-Office System

FirstLook Smart

We recently launched the MySizeID FirstLook Smart Mirror which provides an interactive, mirror-like touch

display that allows brands to provide in-store customers with an enhanced, online shopping experience, contactless checkout and

obtains the recommended size.

The MySizeID FirstLook Smart Mirror can be placed in numerous locations throughout a retail

store, including the fitting rooms (without cameras) or other high-traffic locations of the store.

Highlight capabilities of the

FirstLook Smart Mirror include a 3D “Try-it-on” interactive avatar experience, personalized and highly accurate size recommendations by MySizeID , third-party point of sale systems integration, styling recommendations and

contactless “select and collect” at the register feature.

of MySizeID “first look” smart mirror in a fashion store

are currently offering MySizeID technology

to retailers through either a pay-per-use model or a monthly subscription model.

In our pay-per-use business

model, every time the consumer obtains a recommended size, the retailer is charged for the usage.

addition, we have developed applications for third party ecommerce platforms so that retailers who use those platforms will find our

application on the platform’s app store and will be able to easily install it in their store.

In February 2020, MySizeID became

available for online retailers utilizing the Shopify platform.

Fashion and apparel retailers using Shopify can deploy the MySizeID turnkey

solution through the simple integration of the MySizeID widget on their site.

During 2020 we also released applications for

Lightspeed and for WooCommerce which are the biggest ecommerce platform in the market allowing more retailers to easily integrate

and use the MySizeID solution.

2020, we integrated MySizeID with Wix, PrestaShop and Bitrix, which is the biggest eCommerce platform in Russia.

is a parcel measurement application that can provide real-time logistic data on package volumes and transportation, resulting in

improved operational efficiency and reduced operating expenses.

In addition, BoxSize allows customers to easily measure the size

of their parcel with their smartphone, calculate shipping costs and arrange for a convenient pick-up time for the package.

is available both on iOS and Android.

2020 we released the “One Click” feature on BoxSize that enables the user to measure a package with

just one swipe of the handheld device.

Previously, measurements through BoxSize would require three separate swipes.

Screenshot of BoxSize

We have developed

the “Two Shots”, an algorithm that is intended to make package measurement even faster through two measurements, to

measure the height, width and depth, of a package rather than three separate measurements.

We announced the general

availability of BoxSize mobile measurement solution on the Honeywell Marketplace.

In addition, BoxSize was approved for Honeywell’s

Global Vendor Program BoxSize and is now available to provide highly accurate mobile measurement solutions for thousands of Honeywell

BoxSize mobile measurement solution is

available on the Honeywell Marketplace.

In addition, BoxSize was approved for Honeywell’s Global Vendor Program,

and is available to provide highly accurate mobile measurement solutions for thousands of Honeywell

We also developed a new dashboard for the courier companies to have all the required data about each package in one place.

It includes package dimensions, pictures, scan geo location and more.

The dashboard also let the courier use Webhooks, which allows

him to get the information from his own system.

In 2020, we announced

our partnership with Datalogic, a global leader in the automatic data capture and process automation markets.

The partnership

makes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and Logistics vertical.

Agreement with Katz Delivery Services,

On November 20, 2015,

we entered into an agreement, or the Katz Agreement, with Katz Deliveries, LTD, or Katz, one of the largest courier services in

Pursuant to the Katz Agreement, the parties have agreed to mutually work together to develop and integrate MySize technology

with the Katz ERP to accurately monitor the volume of all parcels delivered to it for shipment by its clients.

The goal is for

Katz to use our technology to help with planning its distribution routes, thus reducing operational costs by adjusting the distribution

includes package dimensions, pictures, scan geo location and more.

The dashboard also let the courier use Webhooks, which allows him

to get the information from his own system.

2020, we announced our partnership with Datalogic, a company focused on the automatic data capture and process automation markets.

The partnership makes our BoxSize measurement solution available to thousands of Datalogic customers in the Transportation and

Logistics vertical.

with Katz Delivery Services, LTD

November 20, 2015, we entered into an agreement, or the Katz Agreement, with Katz Deliveries, LTD, or Katz, one of the largest courier

services in Israel.

Pursuant to the Katz Agreement, the parties have agreed to mutually work together to develop and integrate MySize

technology with the Katz ERP to monitor the volume of all parcels delivered to it for shipment by its clients.

for Katz to use our technology to help with planning its distribution routes, thus reducing operational costs by adjusting the distribution

vehicles to the volume of the shipments.

developed for Katz and is to be used to measure packages, boxes and pallets at Katz’

logistics center.

was developed for Katz and is to be used to measure packages, boxes and pallets at Katz’ logistics center.

The app allows users

to scan the barcode of a package and measure the package dimensions using MySize’s SizeIT technology (described below)

and then subsequently upload the information directly to Katz’s back office.

The technology is being used to control package

volumes and accurately charge Katz’

customers accordingly.

In September 2018,

we entered into a new agreement with Katz pursuant to which we are licensing to Katz on a software-as-a-service basis KatzID

for a monthly fee based on the number of packages measured.

We have completed integration of KatzID into the Katz ERP

To date, there have been no material revenues from this agreement.

We are working on additional

consumer applications.

One of these applications is in the category of DIY.

This application is a smart tape measure for the business

to consumer market which allows users to utilize their smartphone as a tape measure.

The application provides measurements with

an accuracy of plus or minus 2 centimeters.

Through the use of this application users will be able to visualize how an object or

a piece of furniture will fit in an existing room in their home or office.

As many people have difficulty with spatial recognition,

we hope this will help alleviate the problem.

During 2020, we expanded availability of SizeUp to more than 68 different

iOS and Android smartphone models worldwide.

It also added Google Vision for image content analysis, object detection, and title

As of March 1, 2021, there have been over 1,210,600 downloads of the SizeUp app.

Currently the SizeUp

app for Android and iOS is available for free for the first 30 days, after which a user will be required to register via e-mail

and pay a one-time fee of $1.99 to continue using the application.

to scan the barcode of a package and measure the package dimensions using MySize’s SizeIT technology (described below) and

then subsequently upload the information directly to Katz’s back office.

are working on additional consumer applications, including a DIY application.

Our SizeUp application is a smart tape measure

for the business to consumer market which allows users to utilize their smartphone as a tape measure.

The application provides measurements

with an accuracy of within two centimeters.

Through the use of SizeUp users will be able to visualize how an object

or a piece of furniture will fit in an existing room in their home or office.

During 2020, we expanded availability of SizeUp

to more than 68 different iOS and Android smartphone models worldwide.

It also added Google Vision for image content analysis, object

detection, and title suggestions.

the SizeUp app for Android and iOS is available for free for the first 30 days, after which a user will be required to register

via e-mail and pay a one-time fee of $1.99 to continue using the application.

To date, revenues from downloads have been minimal.

We have developed

SizeIT , a smart measuring tape SDK for both Android and iOS platforms.

SizeIT provides users with the ability to

instantly and accurately measure objects with a quick movement of their mobile device.

SizeIT , the core technology behind

MySizeID , SizeUp , and BoxSize applications, can be embedded into any company’s existing or white label

mobile app in a short period of time, offering an efficient solution to the escalating costs associated with product sizing issues

SizeIT enables users to measure objects by moving their mobile device from one side of an object to another

side of the object.

Our algorithm utilizes a mobile device’s motion sensors to calculate the travelled distance.

A new graphical SizeIT

SDK was developed to make it easier and faster to implement the SDK for users who would like to avoid developing their own

graphical user interface.

Research and Development

Our research and development

team is responsible for the research, algorithm, design, development, and testing of all aspects of our measurement platform technology.

have developed SizeIT , a smart measuring tape SDK for both Android and iOS platforms.

SizeIT provides users with the ability

to instantly and accurately measure objects with a quick movement of their mobile device.

SizeIT , the core technology behind MySizeID ,

SizeUp , and BoxSize applications, can be embedded into any company’s existing or white label mobile app in a short

period of time, offering an efficient solution to the escalating costs associated with product sizing issues and returns.

enables users to measure objects by moving their mobile device from one side of an object to another side of the object.

Our algorithm

utilizes a mobile device’s motion sensors to calculate the travelled distance.

and Development

research and development team are responsible for the research, algorithm, design, development, and testing of all aspects of

our measurement platform technology.

We invest in these efforts to continuously improve, innovate, and add new features to our solutions.

We incurred research and development expenses of approximately

$1.5 million in 2020 and $1.5 million in 2019, relating to the development of its applications and technologies.

We intend to continue

to invest in our research and development capabilities to extend our platform and bring our measurement technology to a broader

range of applications.

Sales and Marketing

In 2019, we launched a commercialization strategy that directs

our sales efforts toward both sales to e-commerce players in specific vertical markets such as fashion/apparel and shipping/delivery

as well as to e-commerce third party platform providers.

As of March 26, 2021, we have nine sales offices in the following countries:

US, UK, France, Netherlands, Turkey, Russia, Germany, Israel and Italy, generating customer leads, building out a sales pipeline,

and developing customer relationships.

We believe an effective

method to market our suite of products is for users to actively use and explore its capabilities.

We encourage free trials of

one or more of our products in order to successfully convert those accounts to paid subscriptions.

Proprietary Rights

We rely on a combination

of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractual protections,

to protect our proprietary technology.

As of December 31,

2020, we owned ten issued patents three in each of Russia and the US and one each in Canada, Japan and Israel which expire between

January 20, 2033 and August 18, 2036, and we have eight additional patent applications in process.

As of such date, we do not have

any registered trademarks.

We cannot provide

any assurance that our proprietary rights with respect to our products will be viable or have value in the future since the validity,

enforceability and type of protection of proprietary rights in software-related industries are uncertain and still evolving.

Despite our efforts

to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use information

that we regard as proprietary.

Policing unauthorized use of our products is difficult, and while we are unable to determine the

extent to which piracy of our software products exists, software piracy can be expected to be a persistent problem.

the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States,

and effective copyright, trademark, trade secret and patent protection may not be available in those jurisdictions.

of protecting our proprietary rights may not be adequate to protect us from the infringement or misappropriation of such rights

Further, in recent

years, there has been significant litigation in the United States involving patents and other intellectual property rights, particularly

in the software and Internet-related industries.

We can become subject to intellectual property infringement claims as the number

of our competitors grows and our products and services overlap with competitive offerings.

incurred research and development expenses of approximately $4.25 million in 2021 and $1.5 million in 2020, relating to the development

of its applications and technologies.

The increase from the corresponding period primarily resulted from share based payment in the

amount of $2.6 million attributed to the share issuance to Ms.

Zigdon under that certain Amendment to Purchase Agreement dated May 26,

We intend to continue to invest in our research and development capabilities to extend our platform and bring our measurement

technology to a broader range of applications.

and Marketing

2019, we launched a commercialization strategy that directs our sales efforts toward both sales to e-commerce players in specific vertical

markets such as fashion/apparel and shipping/delivery as well as to e-commerce third-party platform providers.

As of March 18,

2022, we have nine sales offices in the following countries:

US, UK, France, Netherlands, Turkey, Russia, Germany, Israel and Italy,

generating customer leads, building out a sales pipeline, and developing customer relationships.

believe an effective method to market our suite of products is for users to actively use and explore its capabilities.

We encourage free

trials of one or more of our products in order to successfully convert those accounts to paid subscriptions.

rely on a combination of patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as

contractual protections, to protect our proprietary technology.

of December 31, 2021, we owned eighteen issued patents:

six in Europe, four in the US, three in each of Russia and Japan and one each

in Canada and Israel which expire between January 20, 2033 and August 18, 2036, and we have three additional patent applications in process.

As of such date, we do not have any registered trademarks.

cannot provide any assurance that our proprietary rights with respect to our products will be viable or have value in the future since

the validity, enforceability and type of protection of proprietary rights in software-related industries are uncertain and still evolving.

our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or to obtain and use

information that we regard as proprietary.

Policing unauthorized use of our products is difficult, and while we are unable to determine

the extent to which piracy of our software products exists, software piracy can be expected to be a persistent problem.

the laws of some foreign countries do not protect proprietary rights to as great an extent as do the laws of the United States, and effective

Our means of protecting our proprietary

rights may not be adequate to protect us from the infringement or misappropriation of such rights by others.

in recent years, there has been significant litigation in the United States involving patents and other intellectual property rights,

particularly in the software and Internet-related industries.

We can become subject to intellectual property infringement claims as the

number of our competitors grows and our products and services overlap with competitive offerings.

These claims, even if not meritorious,

could be expensive to defend and could divert management’s attention from operating our business.

If we become liable to

third parties for infringing their intellectual property rights, we could be required to pay a substantial award of damages and

to develop non-infringing technology, obtain a license or cease selling the products that contain the infringing intellectual

We may be unable to develop non-infringing technology or obtain a license on commercially reasonable terms, if at all.

Government Regulation

could be expensive to defend and could divert management’s attention from operating our business.

If we become liable to third

parties for infringing their intellectual property rights, we could be required to pay a substantial award of damages and to develop

non-infringing technology, obtain a license or cease selling the products that contain the infringing intellectual property.

unable to develop non-infringing technology or obtain a license on commercially reasonable terms, if at all.

are subject to a number foreign and domestic laws and regulations that involve matters central to our business.

These laws and

regulations may involve privacy, data protection, intellectual property, or other subjects.

Many of the laws and regulations to

which we are subject are still evolving and being tested in courts and could be interpreted in ways that could harm our business.

In addition, the application and interpretation of these laws and regulations often are uncertain, particularly in the new and

rapidly evolving industry in which we operate.

Because global laws and regulations have continued to develop and evolve rapidly,

it is possible that we, our products, or our platform may not be, or may not have been, compliant with each such applicable law

or regulation.

These laws and regulations

may involve privacy, data protection, intellectual property, or other subjects.

Many of the laws and regulations to which we are subject

are still evolving and being tested in courts and could be interpreted in ways that could harm our business.

In addition, the application

and interpretation of these laws and regulations often are uncertain, particularly in the new and rapidly evolving industry in which

Because global laws and regulations have continued to develop and evolve rapidly, it is possible that we, our products, or

our platform may not be, or may not have been, compliant with each such applicable law or regulation.

particular, we are subject to a variety of federal, state and international laws and regulations governing the processing of personal

states have passed laws requiring notification to data subjects when there is a security breach of personally

identifiable data.

states have passed laws requiring notification to data subjects when there is a security breach of personally identifiable

There are also a number of legislative proposals pending before the U.S.

Congress, various state legislative

bodies and foreign governments concerning data protection.

In addition, data protection laws in Europe and other jurisdictions

outside the United States can be more restrictive than those within the United States, and the interpretation and application

of these laws are still uncertain and in flux.

example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations

for entities that process personal data about individuals, including obligations to cooperate with European data protection authorities,

Congress, various state legislative bodies and foreign

governments concerning data protection.

In addition, data protection laws in Europe and other jurisdictions outside the United States

can be more restrictive than those within the United States, and the interpretation and application of these laws are still uncertain

example, the General Data Protection Regulation, or GDPR, which took effect on May 25, 2018, enhances data protection obligations for

entities that process personal data about individuals, including obligations to cooperate with European data protection authorities,

implement security measures and keep records of personal data processing activities.

Noncompliance with the GDPR can trigger fines

equal to the greater of €20 million or 4% of global annual revenue.

In addition, the California Consumer Privacy Act

of 2018, or CCPA, effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of

their personal information, opt out of certain personal information sharing, and receive detailed information about how their

personal information is used.

The CCPA provides for civil penalties for violations, as well as a private right of action for data

breaches, that is expected to increase data breach litigation.

Further, failure to comply with the Israeli Privacy Protection

Law of 1981, and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrative

fines, civil claims (including class actions) and in certain cases criminal liability.

Current pending legislation may result

in a change of the current enforcement measures and sanctions.

Given the breadth and depth of changes in data protection obligations,

meeting the requirements of GDPR and other applicable laws and regulations has required significant time and resources, including

a review of our technology and systems currently in use against the requirements of GDPR and other applicable laws and regulations.

We have taken various steps to prepare for complying with GDPR and other applicable laws and regulations however there can be

no assurance that these steps are sufficient to assure compliance.

Further, additional EU laws and regulations (and member states’

implementations thereof) further govern the protection of individuals and of electronic communications.

If our efforts to comply

with GDPR or other applicable laws and regulations are not successful, we may be subject to penalties and fines that would adversely

impact our business and results of operations, and our ability to use personal data of individuals could be significantly impaired.

We operate in a highly

competitive industry that is characterized by constant change and innovation.

Changes in the applications and the programing languages

used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements.

competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measure and 3DLook.

The principal competitive factors in our

market include the following:

Product and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;

Product extensibility and ability to integrate with other technology infrastructures;

Digital operations expertise;

Ease of use of products and platform capabilities;

Total cost of ownership;

Adherence to industry standards and certifications;

Strength of sales and marketing efforts;

Brand awareness and reputation;

Focus on customer success.

We believe we generally

compete favorably with our competitors on the basis of these factors.

We expect competition to increase as other established and

emerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced.

expect this to be particularly true as we are a smartphone-based offering that does not need to utilize the smartphone’s

camera, and our competitors may also seek to repurpose their existing offerings to provide similar solutions.

Many of our competitors

have substantially greater financial, technical, and other resources, greater name recognition, larger sales and marketing budgets,

broader distribution, and larger and more mature intellectual property portfolios.

Human Capital Management

As of March 26, 2021,

we had a total of 27 employees, of which 24 were full-time employees, including 7 in sales and marketing, 13 in technology and

development and 4 in administration and finance.

None of our employees are represented by a collective bargaining agreement, nor

have we experienced any work stoppage.

We consider our relationship with our employees to be good.

Our future success depends on

our continuing ability to attract and retain highly qualified engineers, sales and marketing, account management, and senior management

We believe that our

future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel.

In particular, we

depend on the skills, experience and performance of our senior management and research personnel.

Noncompliance with the GDPR can trigger fines equal

to the greater of €20 million or 4% of global annual revenue.

In addition, the California Consumer Privacy Act of 2018, or CCPA,

effective as of January 1, 2020, gives California residents expanded rights to access and require deletion of their personal information,

opt out of certain personal information sharing, and receive detailed information about how their personal information is used.

provides for civil penalties for violations, as well as a private right of action for data breaches, that is expected to increase data

breach litigation.

Further, failure to comply with the Israeli Privacy Protection Law of 1981, and its regulations, as well as the guidelines

of the Israeli Privacy Protection Authority, may expose us to administrative fines, civil claims (including class actions) and in certain

cases criminal liability.

Current pending legislation may result in a change of the current enforcement measures and sanctions.

the breadth and depth of changes in data protection obligations, meeting the requirements of GDPR and other applicable laws and regulations

has required significant time and resources, including a review of our technology and systems currently in use against the

requirements of GDPR and other applicable laws and regulations.

We have taken various steps to prepare for complying with GDPR and other

applicable laws and regulations however there can be no assurance that these steps are sufficient to assure compliance.

Further, additional

EU laws and regulations (and member states’ implementations thereof) further govern the protection of individuals and of electronic

communications.

If our efforts to comply with GDPR or other applicable laws and regulations are not successful, we may be subject to

penalties and fines that would adversely impact our business and results of operations, and our ability to use personal data of individuals

could be significantly impaired.

operate in a highly competitive industry that is characterized by constant change and innovation.

Changes in the applications and the

programing languages used to develop applications, devices, operating systems, and technology landscape result in evolving customer requirements.

Our competitors include True Fit, Virtusize, EasyMeasure, AR MeasureKit, Smart Measure and 3DLook.

principal competitive factors in our market include the following:

and platform features, architecture, reliability, privacy and security, performance, effectiveness, and supported environments;

extensibility and ability to integrate with other technology infrastructures;

operations expertise;

of use of products and platform capabilities;

cost of ownership;

to industry standards and certifications;

of sales and marketing efforts;

awareness and reputation;

on customer success.

believe we generally compete favorably with our competitors on the basis of these factors.

We expect competition to increase as other

established and emerging companies enter our markets, as customer requirements evolve, and as new products and technologies are introduced.

We expect this to be particularly true as we are a smartphone-based offering that does not need to utilize the smartphone’s camera,

and our competitors may also seek to repurpose their existing offerings to provide similar solutions.

Many of our competitors have substantially

greater financial, technical, and other resources, greater name recognition, larger sales and marketing budgets, broader distribution,

and larger and more mature intellectual property portfolios.

Capital Management

of March 14, 2022, we had a total of 32 employees, of which 30 were full-time employees, including 13 in

sales and marketing, 14 in technology and development and 5 in administration and finance.

None of our employees are represented

by a collective bargaining agreement, nor have we experienced any work stoppage.

We consider our relationship with our employees to be

Our future success depends on our continuing ability to attract and retain highly qualified engineers, sales and marketing, account

management, and senior management personnel.

believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel.

In particular,

we depend on the skills, experience and performance of our senior management and research personnel.

We compete for qualified personnel

with other medical device, biotechnology, pharmaceutical and healthcare companies, as well as universities and non-profit research

institutions.

We provide competitive

compensation and benefits programs to help meet the needs of our employees.

In addition to salaries, these programs (which vary

by country/region and employment classification) include incentive compensation plan, pension, healthcare and insurance benefits,

paid time off, family leave, and on-site services, among others.

We also use targeted equity-based grants with vesting conditions

to facilitate retention of personnel, particularly for our key employees.

The success of our

business is fundamentally connected to the well-being of our people.

Accordingly, we are committed to the health and safety of

our employees.

with other hi-tech companies, as well as universities and non-profit research institutions.

provide competitive compensation and benefits programs to help meet the needs of our employees.

In addition to salaries, these programs

(which vary by country/region and employment classification) include incentive compensation plan, pension, and insurance benefits,

paid time off, , among others.

We also use targeted equity-based grants with vesting conditions to

facilitate retention of personnel, particularly for our key employees.

success of our business is fundamentally connected to the well-being of our people.

Accordingly, we are committed to the health and safety

of our employees.

In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest

of our employees, as well as the communities in which we operate, and which comply with government regulations.

This includes

having employees work from home, while implementing additional safety measures for employees continuing critical on-site work.

We consider our relations

with our employees to be good.

What changed 10-K

Item 1. Business